Summary: Mrs X complained the Council did not properly manage the rates account for her business, Company E, and handled her complaints poorly, causing distress, time and trouble. We found the Council at fault in how it decided on rates’ liability and how it handled Mrs X’s complaints. We recommended it provide Mrs X with an apology, payments for time, trouble and distress and act to prevent recurrence.

The complaint

1. Mrs X complains on behalf of her business, Company E, that the Council:
• delayed updating its records to amend the name of Property 2 to Property 1;
• incorrectly held Company E liable for business rates at Property 1/2 from 2011 to July 2019;
• incorrectly held Company E liable for business rates at Property 3 and;
• dealt with her complaints poorly.
2. Mrs X says this caused her stress, time and trouble.

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What I have investigated

3. I have investigated the complaint above. At the end of this decision I have explained why I have not investigated other matters.

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The Ombudsman’s role and powers

4. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. The law says we cannot normally investigate a complaint unless we are satisfied the council knows about the complaint and has had an opportunity to investigate and reply. However, we may decide to investigate if we consider it would be unreasonable to notify the council of the complaint and give it an opportunity to investigate and reply (Local Government Act 1974, section 26(5))
6. We provide a free service, but must use public money carefully. We do not start or may decide not to continue with an investigation if we decide there is another body better placed to consider this complaint. (Local Government Act 1974, section 24A(6))
7. This complaint involves events that occurred during the COVID-19 pandemic. The Government introduced a range of new and frequently updated rules and guidance during this time. We can consider whether the council followed the relevant legislation, guidance and our published “Good Administrative Practice during the response to COVID-19”.
8. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

9. I spoke to Mrs X and I reviewed documents provided by Mrs X and the Council.
10. I gave Mrs X and the Council an opportunity to comment on a draft decision. I considered their comments before making a final decision.

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What I found

Liability for business rates

11. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers
• owners, and
• persons named in central rating lists.
12. Case law says the four conditions of rateable occupation are:
• actual occupational possession
• exclusive occupation or possession
• occupation or possession which is of some value or benefit to the occupier/possessor
• occupation or possession which has a sufficient quality of permanence.
13. The case law on rates liability is highly technical. It is for a council to decide who is the correct liable ratepayer. However, the Ombudsman can consider if a council has followed a proper decision making process.

Council Complaints process

14. The Council has provided a copy of its August 2020 complaints policy. This explains it has a three stage complaint process.
• Stage one: A service review with Head of Service responsibility.
• Stage two: A review with Chief Executive responsibility. If you are not happy with the outcome of your stage 1 complaint, if you have a further complaint, or the complaint is of a more complex nature, for example regarding the conduct of an individual employee, further investigation will be required and the matter will be investigated by the Chief Executive’s Office.
• Stage three: Ombudsman
15. It will usually respond within 10 working days at stage 1 and 2, but complex matters may take longer.

Principles of good administrative practice

16. In 2018 the Ombudsman published a guidance document setting out the standards we expect from bodies in jurisdiction “Guidance on Good Administrative Practice”. The following points are relevant in this case.
• Taking reasonable, timely decisions, based on all relevant considerations
• Stating the criteria for decision making and giving reasons for decisions
• Ensuring decisions and actions are proportionate, appropriate and fair
• Having clear and accessible appeal routes
• Putting mistakes right quickly and effectively
• Operating an effective complaints procedure, which includes offering a fair and appropriate remedy when a complaint is upheld
17. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. This shows we expected similar standards from councils, even during crisis working.

What happened

18. Mrs X runs two businesses, Company B and Company E.
19. I have only referred to matters relevant to this investigation below. I have not included any complaints about data protection issues or any complaints related to Company B.
20. Mrs X applied for a business grant for Company B.
21. On 26 August 2020, in response to this request, the Council raised various issues concerning Company E.
22. The Council explained to verify grant requests it was checking the details it held on properties owned by Company E. It found some of these properties had been vacated by tenants many years ago yet still benefited from the rates relief available to occupied properties. It considered this was an attempt to avoid paying rates on empty properties.
23. Mrs X responded that she had always paid rates as due and requested the Council say which properties it was referring to so she could look into this. She also said that in October 2019 she gave the Council details of the new tenant at Property 1, taking over from Mr Z, however the Council did not update its records. It appeared the Council had named Property 1 as Property 2 which may have caused the problem. She queried who the Council recorded as ratepayer at Property 1/2.
24. The Council said:
• It had no record of a letter from Mrs X in October 2019 and it is possible it was unable to match this to its records given the confusion over the numbering of the properties.
• It recorded Mr Y as the ratepayer for Property 2 but it now understood the property was empty for a period from 2011 to November 2019. It would therefore make Company E liable for this period. It would also rename Property 2 to Property 1 to match the address she used. It was not clear when this change in name happened.
• It recorded Mr Y as the ratepayer at Property 4 for a period.
• In searching its records it had found information that Company E occupied Property 3. It now made Company E liable for rates at Property 3.
• It expected Mrs X as the landlord to notify it of changes to tenancy. It requested details and leases in respect of four individuals.
25. Mrs X responded on 30 September as follows:
• She did not recall Mr Y. She disputed Company E was liable for rates at Property 1/2 from 2011 to 2019 as she had proof Mr Z was a tenant up to July 2019. The Council had since accepted another tenant took over from October 2019. She told the Council by letter of October 2019 that a new tenant had taken over Property 1/2.
• She did not understand why the Council recorded Mr Y as a tenant in Property 4 as Company E leased Property 4 to Mrs Z.
• She acknowledged she previously gave the Council information that Company E occupied Property 3 however this was a mistake. In August 2019 she gave the Council information that Company B occupied Property 3 and it billed Company B going forward.
• She asked for more information regarding the Council’s queries on three individuals.
26. The Council replied on 22 October. In summary:
• Mrs X had failed to tell the Council about changes in tenants dating back to 2011.
• It recorded three persons as ratepayers at various properties owned by Company E but believed this information was out of date. It had no information to give Mrs X but was awaiting information from her.
• It recorded Mr Y as the ratepayer at Property 1/2. It awaited a copy of Mr Z’s lease.
• It recorded Mr Y as the tenant at Property 4 up to March 2019 and held no records regarding a Mrs Z. Mrs X would need to provide copies of Mr Y and Mrs Z’s leases if she disputed this.
• It repeated that it held information that Company E occupied Property 3 and so made it liable for rates at Property 3.
27. On 11 November Mrs X complained:
• The Council had billed Company E for Property 1/2 from 2011 to July 2019 despite her saying Mr Z was the occupant. And it had not explained why it initially sought to hold both Company E and the new tenant liable for October 2019.
• The Council said it had been investigating but at no time from April to September did it ask her for information about the tenants.
• The Council said it recorded Mr Y as the ratepayer at Property 1/2 and Property 4. However, as the Council would have sent Mr Y all correspondence she could not know it held the incorrect details. The Council should perhaps ask Mr Y why he allowed the Council to continue to bill him.
• She queried what evidence Mr Y provided that he left Property 1/ 2 in order for the Council to seek to bill Company E. In fact Mr Z occupied Property 1/2 for the relevant period under a verbal agreement. She enclosed documents to support this.
• She enclosed a lease and further evidence to show Mrs Z was the tenant at Property 4, not Mr Y.
• She repeated that she corrected a mix up in August 2019 and since then the Council had correctly billed Company B as ratepayer for Property 3. Company E was not the occupant of Property 3.
• The Council could have asked her for this information months ago.
• The Council had not explained why it took six months to amend the name of Property 2 to Property 1.
• Company E would not pay the rates bill for Property 1/2 as it was not the liable party. The Council should bill Mr Z or Mr Y.
• The Council had given her little information regarding the three individuals. She provided some information on two but could not recall who the third was.
• She felt the Council officer involved was acting with bias.
28. On 27 November the Council told Mrs X the Director of Corporate Services, rather than the Chief Executive, would respond to her complaint as he had access to the records. It further explained it would respond at stage 1 due to the new matters raised.
29. On 13 December Mrs X complained:
• She had received an email from the Council that it was passing her complaint to an officer to respond, despite her complaining about the conduct of that same officer.
• She expected the complaint to be dealt with by the Chief Executive at stage 2 in line with its complaints policy.
• The Council had delayed in responding to her complaint.
• She had found an email sent to the Council in February 2019 reporting that Mr Z had left Property 3 but remained at Property 1/2. She therefore queried why the Council continued to bill Mr Y.
• The Council asked her about three tenants it held as ratepayers yet had been unable to provide the property details for these.
30. On 15 December the Director of Corporate Services replied to the complaint of 11 November as follows:
• Until March 2020 its records referred to Property 2 but further to her update it would now record this as Property 1.
• On review of her documents it would record that Mr Z left Property 1/2 in July 2019 and adjust Company E’s account.
• The Council now recorded Company E as the ratepayer at Property 4 following Mr Y’s departure.
• The Council erred in recording Company B as ratepayer at Property 3 and now named Company E as ratepayer. It enclosed information received in July 2019 to support this. It previously held Mrs Z as the ratepayer.
• The Council detailed the information held on three individuals regarding properties 5, 6 and 7 and said what information it needed from Mrs X.
• It was incorrect to say an officer had taken personal views into account.
31. On 18 December the Director suggested Mrs X’s complaints of 13 December were likely being dealt with by another officer.
32. On 4 January 2021 Mrs X confirmed the complaint of 13 December was for the Director and set out the matters still not addressed:
• The Council still maintained Mr Y occupied Property 4 in March 2020 despite her providing a lease showing Mrs Z was the tenant.
• The Council now says its records showed Mrs Z occupied Property 3 prior to Company E. But she had provided a lease showing Mr Z was the tenant.
• Property 1/2 was not empty but was occupied by Mr Z up to July 2019.
• She had already given the Council information on Property 7.
• She asked the Council from more information on its queries but it initially said it had no further information.
• She had said several times she erred in reporting Company B as the occupant of Property 3 and corrected this in August 2019. She queried why the Council would now record Company E as the ratepayer.
• She asked why the Council:
1. took six months to amend the name of Property 2 to Property 1;
2. delayed asking her for information until September 2020;
3. did not reply to her complaint at stage 2 given she was unhappy with how her complaint was handled, it was complex, and it was about the conduct of an employee;
4. passed the complaint to the initial Council officer to reply;
5. tried to bill both a new tenant and Company E for October 2019;
6. ignored evidence she provided.
33. In its reply of 16 January 2021 the Council told Mrs X:
• It was usual for the officer involved to respond to a complaint first, and it had not suggested it would do otherwise.
• It had queries about grant claims and related third parties so carried out further checks.
• She raised some new issues so it dealt with this at stage 1.
• Upon her evidence that Mrs Z was a tenant at Property 4 it had amended its records.
• Upon her evidence that Mr Z was a former tenant at Property 3 it updated its records. It had already explained why it now recorded Company E as the ratepayer at Property 3.
• Upon her evidence it updated that Mr Z was a former tenant at Property 1/2.
• It did not ignore her evidence regarding Property 7, rather the information was illegible.
• It had the tenants’ information so the information was withheld.
• It held information dated July 2019 that Company E occupied Property 3.
• It had no information to update Property 2 to the name Property 1 until she raised this recently.
• It was not possible to charge for the same period (October 2019) twice.
34. On 28 January 2021 the Council spoke to Mrs X by phone to discuss her complaint, though it has no record of this call.
35. On 7 February Mrs X sent the Council evidence to show Company B occupied Property 3. She said the Council had since accepted Mr Z was a tenant at Property 1/2 up to July 2019. She wanted written confirmation of this and a new rates bill issued to show Company E did not owe any rates for the relevant period. She remained unhappy with how the Council had handled these matters. She also enclosed the email confirming the Director would be dealing with her complaint which is why she was concerned to then hear the initial officer was still involved.
36. The Council told Mrs X that following receipt of the tenancy agreement it would rebill Company B rather than Company E for Property 3 and make the relevant invoice changes. It said there remained a question over liability for Property 1/2 however in the interests of resolution it would change the liable tenant and cancel the bill issued to Company E. It asked if this satisfied Mrs X’s complaint and if so it would action this.
37. Mrs X said there should be no doubt that Mr Z occupied Property 1/2 up to July 2019 given the evidence she provided. She wanted written confirmation that Company E was not liable for rates. She also asked if this was the Council’s final response.
38. The Council said it depended whether she was satisfied with its last response.
39. Mrs X said she was not willing to close her complaint given the way she had been treated and resulting stress. She expected the Council to spend time checking what matters it had not addressed rather than herself. She queried why she had to drop her complaint for the Council to remedy Company E’s account.
40. The Council said it had discussed her complaints and offered resolution. It would not now look over previous correspondence to see what else it could do if she was not prepared to say what action she wanted. She could go to the Ombudsman.
41. In response to enquiries the Council confirmed it rescinded the bill issued to Company E for Property 1/2 for the period it agreed a third party was liable, on 27 January 2021.
42. The Council said the Grant funding schemes raised many issues regarding inaccurate records. It was resource intensive to address these issues which ultimately had a knock-on effect with regards to the time taken to resolve.
43. In response to a draft of this decision Mrs X said the Council could have amended its records from Property 2 to Property 1 in March 2020 but did not do so. She provided the following documents:
• An email of 26 March 2020 from her to the Council. In this she referred to Mr Z occupying Property 1 since 2011 and gave the Valuation Office Agency’s (VOA) reference number for the property.
• An email of 13 April 2020 from the current tenant of Property 1 to the Council. This provides the VOA reference number for the property and explains the Council has recorded it as Property 2, but it should be named as Property 1.
• An email of 20 May 2020 from the current tenant of Property 1 to the Council. The tenant again asked for the Council to amend the property name, providing the VOA reference number and an account number in support.

Findings

44. The Council made decisions on business rates’ liability for various properties owned by Company E without first gathering or taking into account relevant information from Mrs X. This is fault.
45. As a result the Council named Company E as ratepayer for Property 1/2 and Property 3 in error and issued rates bills to Company E in error. It also put Mrs X to time and trouble seeking to resolve this.
46. On review of the further evidence provided by Mrs X, I am satisfied the Council had enough information in April 2020 to amend the property name on its records from Property 2 to Property 1. However, it did not take action until September 2020 after Mrs X had raised this again. I find this delay amounts to fault. I acknowledge this caused Mrs X frustration and additional time to resolve.
47. I find fault in the Council’s complaint handling because:
• It was not clear about the information it required Mrs X to provide.
• It initially maintained its decisions without considering the information Mrs X provided.
• It confirmed it held Mr Z liable at Property 1/2 up to July 2019 and so would not bill Company E for the period up to July 2019 yet later suggested there remained a question over liability.
48. This caused Mrs X to spend longer in the complaints process than necessary and caused her avoidable distress and uncertainty.
49. I acknowledge the Council delayed providing its initial response to the complaint, however I do not consider this was such a delay to amount to fault. I also acknowledge there was some confusion about who would respond to the complaint and at what stage. The Council explained why a Director rather than the Chief Executive would respond and explained why it would issue this response at stage 1. I consider the Council was entitled to take this view. And, the officer complained of did not respond at stage 1. I therefore find no fault.

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Agreed action

50. To remedy the injustice set out above the Council should carry out the following actions:
51. Within one month:
• Provide Mrs X with a written apology;
• Pay Mrs X £150 for time and trouble;
• Pay Mrs X £150 for distress and uncertainty.
52. Within three months:
• Remind staff of the need to gather and take account of relevant information before reaching decisions on business rates liability;
• Provide relevant staff with training on effective complaint handling.
53. The Council has accepted my recommendations.

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Final decision

54. I find fault in how the Council decided on rates’ liability and how it handled Mrs X’s complaint. The Council has accepted my recommendations and I have completed my investigation.

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Parts of the complaint that I did not investigate

55. I have not investigated Mrs X’s complaints the Council breached data protection law as the Information Commissioner’s Office is the appropriate body to consider this.
56. I have not investigated Mrs X’s complaint the Council did not apply empty property relief correctly as this was premature at the time Mrs X contacted the Ombudsman. It is reasonable to allow the Council the opportunity to investigate and resolve this.

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Investigator's decision on behalf of the Ombudsman